The business process outsourcing (BPO) sector could enjoy tax incentives relating to property, as well as customised support, if operators move to the inner city, says Charnell Hebrard, project consultant of the Economic Development Unit at the City of Johannesburg.
She says these incentives are part of the drive to revitalise Johannesburg's city centre (CBD). "The regeneration of the inner city has attracted big and small business back because of the convenience and commercial rationale of being there. It is definitely well-positioned to be SA's smart city, enabling it to compete on a global platform."
Grant Allan, business manager of Intelleca, says moving a contact centre into the city centre makes excellent business sense. "More and more people are moving to the CBD, not only because of tax incentives offered by the government, but because it has all the aspects conducive to running a successful call centre."
One of the primary reasons companies need to look at working from the CBD is good access to Gauteng's transport system, he notes. "The contact centre is labour-intensive, and being close to the city centre gives employees better access to transport, where places like Bryanston have less access to these systems."
Hebrard agrees: "Transport, together with the proximity to the labour pool, makes it easier, cheaper and more convenient for staff to get to work. This has a direct result on absenteeism, attrition and subsequently, productivity."
Perfect fit
According to Hebrard, BPO activity has been growing dynamically in the last five to eight years, and the drive to move business into the inner city gained momentum over the past three years.
She says the city has already seen significant business movement into the inner city. "Outsourcers, such as Dialogue Group, who were initially operating in Cape Town, have opened a significant site in Harrison Street, and the Merchants operation, in Fox and Commissioner Streets, has doubled in size."
She adds that the CBD has seen growth of at least 1 000 contact centre seats over the past year.
"Significantly, global BPO operations are considering the inner city as a destination for their offshore activity."
Allan says SA is positioned as one of the top 25 outsourcing destinations in the world, but - more significantly - he believes the country is ready to take on India in this sector.
"India's tax rebates for offshore investors in the BPO sector has expired, which has raised the cost of doing business there. SA is well-positioned to compete internationally.
"People often complain about the crime in the city centre, but really the aspect of safety is becoming much less of an issue in the CBD, I would be more worried about my business in Sandton," says Allan. He adds that there are people interested in moving into the city, but have no idea what it has to offer.
Many players are coming to the party with the rejuvenation of the CBD, Allan notes: "Property moguls are providing refurbished space that is not available anywhere else at the prices offered in the CBD."
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